Piramal Capital and Housing Finance (PCHFL) has initiated bankruptcy proceedings against Anil Ambani-controlled Reliance Power and its subsidiary Reliance Natural Resources (RNRL), following a default of Rs 526-crore loan.
RNRL, which was merged with Reliance Power in 2010, had obtained the loan from Dewan Housing Finance Corporation (DHFL). The Piramal Group, controlled by billionaire Ajay Piramal, had acquired DHFL for a total consideration of Rs 34,250 crore in 2021 and then merged it with PCHFL.
PCHFL has moved the National Company Law Tribunal’s Mumbai bench under Section 7 (initiation of insolvency proceedings against the corporate debtor by a financial creditor) of the Insolvency and Bankruptcy Code (IBC), sources close to the development said.
When contacted a Reliance Power spokesperson declined, while a PCHFL spokesperson could not be immediately reached for comments.
As per Reliance Power’s website, the company has close to 6,000 MW of operational power generation assets, including the 3,960 MW Sasan Ultra Mega Power Project in Madhya Pradesh.
The company’s projects under development include three coal-fired projects, one gas-fired project and twelve hydroelectric projects in Arunachal Pradesh, Himachal Pradesh and Uttarakhand.
A number of firms of Anil Ambani group, including Reliance Infratel (the tower arm of Reliance Communications), Reliance Telecom, Reliance Naval and Reliance Capital are currently under insolvency processes.
In September 2021, PCHFL had completed the acquisition of beleaguered DHFL, following which it now has access to over 1 million customers across 24 states and a network of 301 branches.
DHFL had gone bankrupt after it owed over more than Rs 90,000 crore to various lenders including banks, mutual funds and individual investors. In November 2019, the Reserve Bank of India had referred the mortgage lender to IBC, and later in January 2021, 94% of DHFL’s creditors voted in favour of a resolution plan submitted by Piramal Group.